Economy and Development

Bhutan’s development has been rapid. Until the 1950s, Bhutan isolated itself from the rest of the world, and its dispersed rural population depended on subsistence agriculture. Bhutan has made great progress in improving the living standards of its people since commencement of the First Five Year Plan development in the 1961. Currently, the overall economic development policy is guided by the overarching philosophy of Gross National Happiness that has been well articulated in the Eleventh Five Year Plan. The Eleventh Five Year Plan (July 2013-June 2018) is under implementation.

As per the development indicators, Bhutan has a per capita income of US$ 2,500, which is one of the highest in South Asia. In the last three decades, Bhutan’s economy has expanded at a robust pace driven by the hydropower sector. Gross Domestic Product (GDP) growth is estimated at 6.5 percent in 2015. Drivers of growth include continued construction of hydropower and implementation of developmental projects financed through grants and aids. Life expectancy has increased from 47 years in 1985 to 68 years today. Adult literacy rate is 59.5 percent while primary school enrolment has reached 99 percent and access to primary health care is over 95 percent.

All villages now have access to basic amenities such as education, running water, basic healthcare and are connected by roads and electricity. Even the most remote villages have connection to the telecommunication network including mobile phone service. At the same time, 12 percent of the population is not yet free from poverty.